Tax-cut bill fails; House lacks votes to override veto

JEFFERSON CITY — A Republican push to cut Missouri's income taxes failed Wednesday when the state House fell significantly short of the two-thirds majority needed to override a veto by Gov. Jay Nixon.

The vote marked a major victory for the Democratic governor, who had warned that the tax cut could jeopardize funding for public education, mental health care and other state services.

The House voted 94-67 to override Nixon's veto. But that fell significantly short of the 109 votes needed for a two-thirds majority. As a result, the override never was considered by the Senate.

The tax cut bill was one of the most high-profile issues among Nixon's 33 vetoes this year.

Republican legislative leaders had touted the tax cut as an important means of spurring the economy and competing for businesses against Kansas, Oklahoma and other states that recently cut income taxes. The GOP holds 109 House seats — the exact amount needed for a veto override. But rank-and-file Republicans were not united on the bill.

The legislation would have gradually reduced Missouri's corporate income tax rate from 6.25 percent to 3.25 percent and its top tax rate for individuals from 6 percent to 5.5 percent over the next decade, so long as state revenues continued to rise by at least $100 million annually. It also contained a five-year phase-in for a new 50 percent tax deduction for business income reported on individual tax returns.

Another part of the bill would have triggered an additional Missouri income tax cut if the federal government enacted a law making it easier for states to collect taxes on online retail sales.

In addition to raising concerns about the hit to the state budget, Nixon also opposed the bill because it contained an apparent drafting error that would have imposed state sales taxes on prescription drugs.